To pension or not pension?

Discussion in 'Employment & HR' started by leftthenright, Apr 7, 2019.

?

Workplace pension

  1. Yay

    4 vote(s)
    80.0%
  2. Nay

    1 vote(s)
    20.0%
  1. leftthenright

    leftthenright UKBF Newcomer Free Member

    18 1
    Are workplace pensions better than putting savings away in a ISA account? What are the recognised options people go for and what are the top things to consider?
     
    Posted: Apr 7, 2019 By: leftthenright Member since: Mar 26, 2019
    #1
  2. Mr D

    Mr D UKBF Legend Free Member

    16,191 1,804
    Better is rather subjective...

    Say your employer is topping your pension up by 2% - its possible they will adjust pay rises, perks etc to cover their increased cost by you using the pension scheme. Perhaps even not have a pay rise one year.

    Someone on a grand a month, having £80 pension building up over time (for example) while only paying part of that themselves directly.... they may consider that good.
    Or they may find they are unable to afford such a high figure.

    Last year at my wife's employer a good chunk of the workforce opted out of the new pension scheme immediately upon receiving the first payslip where the payment was taken. She's thinking a lot of staff with the pension will drop out this month. Too much squeeze on pay packet and they get a 1p an hour pay rise.

    ISA you usually have more control but also more temptation to use it.
     
    Posted: Apr 8, 2019 By: Mr D Member since: Feb 12, 2017
    #2
  3. Newchodge

    Newchodge UKBF Big Shot Free Member

    12,464 3,236
    You get a better return on a pension and your employer and the government both contribute to it.
     
    Posted: Apr 8, 2019 By: Newchodge Member since: Nov 8, 2012
    #3
  4. AllUpHere

    AllUpHere UKBF Ace Free Member

    3,022 1,088
    I don't think you can put much into an isa. I think the amount is capped.
    You may also need to consider that if the employer contributes a large amount to the pension, some of it is taxable. My brother found this out recently when he started having to pay the highest rate of tax on 20 grands worth of his annual pension contributions.
     
    Posted: Apr 8, 2019 By: AllUpHere Member since: Jun 30, 2014
    #4
  5. Mr D

    Mr D UKBF Legend Free Member

    16,191 1,804
    Always a better return on the pension compared to the ISA?
     
    Posted: Apr 8, 2019 By: Mr D Member since: Feb 12, 2017
    #5
  6. Nochexman

    Nochexman UKBF Enthusiast Free Member

    1,862 286
    Broadly speaking it is easier to access your funds in an ISA than it is in a pension. If you are younger it is generally better to have access to your funds rather than tieing them up in a pension. As you get closer to retirement pensions become more attractive. Do your own research.
     
    Posted: Apr 8, 2019 By: Nochexman Member since: Jun 14, 2011
    #6
  7. DontAsk

    DontAsk UKBF Ace Free Member

    1,067 139
    Generally yes. Even if the pension is left in cash the tax relief and the employer contribution will make it hard to beat the employee saving their contribution in any form of ISA.
     
    Posted: Apr 8, 2019 By: DontAsk Member since: Jan 7, 2015
    #7
  8. Mr D

    Mr D UKBF Legend Free Member

    16,191 1,804
    And the money collected is paid to next of kin when you die?
     
    Posted: Apr 8, 2019 By: Mr D Member since: Feb 12, 2017
    #8
  9. MikeJ

    MikeJ UKBF Big Shot Free Member

    5,659 1,620
    Yes, if you're under 75
     
    Posted: Apr 8, 2019 By: MikeJ Member since: Jan 15, 2008
    #9
  10. consultant

    consultant Your Business Community Staff Member

    5,437 751
    Are you asking as an employee, self employed, etc?
     
    Posted: Apr 8, 2019 By: consultant Member since: Jan 21, 2008
    #10
  11. DontAsk

    DontAsk UKBF Ace Free Member

    1,067 139
    Yes. Full stop. Although there may be tax to pay if the deceased is over 75.
     
    Posted: Apr 8, 2019 By: DontAsk Member since: Jan 7, 2015
    #11
  12. Mr D

    Mr D UKBF Legend Free Member

    16,191 1,804
    Great, thanks.
     
    Posted: Apr 8, 2019 By: Mr D Member since: Feb 12, 2017
    #12